American Elephants


The Trump Agenda for Achieving 3% Economic Growth by The Elephant's Child

The overarching goal of the Trump administration is to Make America Great Again, which means promoting MAGAnomics—sustained 3% economic growth. That’s Mick Mulvaney, director of the Office of Management and Budget, writing in the Wall Street Journal on Wednesday.

For most of our nation’s modern history, a healthy American economy meant one that grew at roughly 3.5%. That was the average growth rate between the late 1940s and 2007. Since then, it has hardly topped 2%.

The difference between those two growth rates is staggering. If the American economy had grown at only 2% between the end of World War II and 2000, average household income would have been roughly $26,000 instead of $50,000.

Over the next 10 years, 3% growth instead of 2% will yield a nominal gross domestic product that is $16 trillion larger, federal government revenues $2.9 trillion greater, and wages and salaries of American workers $7 trillion higher.

What’s involved? Tax Reform: Encouraging capital investment will boost productivity. When businesses have more money to invest in plants and equipment, it means hiring more people who produce more. Lower tax rates reduce the cost of capital and thus ignite economic growth. 70% of business income goes to wages, so the benefits flow to workers as well.

Controlling unnecessary regulation: Regulations often turn out to be far more burdensome than the regulators realized, and they increase the cost of doing business. The EPA has been extravagant with overzealous environmental regulations and have pushed many businesses overseas. Realistic cost-benefit analysis helps to protect jobs as well as keeping the environment.

Welfare reform: Many people who could be working are staying home. We need them to go back to work, but the welfare system creates disincentives for those who seek work. Welfare reform will ensure that those who are truly in need of help will get it, but does not encourage people to stay home.

Smart energy strategy: Cheaper, cleaner, more abundant energy will increase investment and employment across many industries. Reliable supplies and stable prices will reduce uncertainty especially in the manufacturing sector and reduce the risks of building new plants and hiring more workers.

Fair Trade is already beginning to work. Government spending restraint is currently visible in the White House budget, and has the entire government at work figuring out how to accomplish more with less waste and more efficiency. Private investment allocates capital more efficiently than government. Rebuilding America’s infrastructure will create more jobs, but environmental restrictions and bureaucratic red tape can play hob with the best intentions.

The Founders may never have expected in their wildest dreams the enormous bureaucracy of our nation’s capitol, but they were very familiar with human nature and its flaws—and that doesn’t change. The Constitution was intended to slow things down, to require more consideration and more responsibility. MAGAnomics is intended to set the stage for the greatest revival of the economy since the early 1980s. It will remind people what a great America means.

Sounds like a good plan to me.




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